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Closing Bell

News/Business. Maria Bartiromo, Bill Griffeth. A guide through the most important hour of the Wall Street trading day. New. (CC) (Stereo)

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01:00:00

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San Francisco, CA, USA

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Comcast Cable

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Virtual Ch. 58 (CNBC)

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mpeg2video

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ac3

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704

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480

TOPIC FREQUENCY

Us 15, S&p 11, Scott 6, China 5, Citibank 4, America 4, Hp 3, Aetna 3, New York 3, Jeff 3, U.s. 3, Barclays 2, Josh Brown 2, Joe Greco 2, Bob Pisani 2, Ron 2, Europe 2, Obama 2, Ron Insana 2, Mark Bertolini 2,
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  CNBC    Closing Bell    News/Business. Maria Bartiromo, Bill Griffeth. A guide  
   through the most important hour of the Wall Street trading day....  

    January 31, 2013
    3:00 - 4:00pm EST  

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to prevent workplace injuries. you don't want to hear the stories about the body lifters, folks. trust me. let your mind go a little bit there. there were nearly 400 vendors at the recent convention all pushing the latest products. the last products you'll ever need and to see more of innovation check out "death, it's a living" tonight at 9:00 p.m. pacific. we can talked about you can cheat death and you can also short death, and maybe you would have liked to. some of the returns in some of the publicly traded death companies. hillenbrand, sci corporation, and matthews international. there you see them compared with the s&p. the only one that's outperformed the s&p would be sci. >> we'll tune in tonight and my vote for the best ever named cnbc primetime special. mandy drury, you're in san diego big conference. wrap it up for us. >> well, i was just having some thoughts about that funeral conference. i'm, of course, at the t.d. ameritrade conference but really the perfect business model.
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guaranteed customers, as you say. here, there are 3,000 here at the conference, they tend to be feeling more bullish. let's see whether or not that will last. i'll give a bit of a shout-out to the nice folks behind me who just passed over some garretts popcorn. i'll bring it back from the team. this is from chicago, of course, and for you, brian, i'm now going to go out on the search for the perfect fish taco, and the i hope the plane does not mind when i bring it back. >> coronado brewing company or glean flash while you're out there. thanks for watching, everybody. >> thank you. >> "closing bell" comes up right now. >> hi, everybody. we're into the final stretch. welcome could the "closing bell." i'm maria bartiromo at the new york stock exchange. dow 14,000 on hold once again, scotty. >> we're watching it to the finish. i'm scott wapner in for bill griffith. the final day of the month. the dow on pace for its best
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january performance in decades. hard for me to even say it, but will that carry over into the rest of the year? we have some very different views on that. >> we sure do. dow 14,000 could hinge on tomorrow's jobs report. we're going to navigate that for you. the market shrugged off that disastrous gdp number and may not be so forgiving if employment is also weak. we'll check on the preview for the jobs numbers and see where we stand as we approach the final hour. the dow jones industrial average flat on the session, down about 8 points, as you can see there, at 13,901. nasdaq composite looks like this, similar chart pattern where we actually saw a bounce in the last couple of minutes on the nasdaq and the s&p 500. on to the nasdaq where we actually see gains from the nasdaq composite, up about 3 point on the nasdaq and s&p 500 right around where it began the session, down just a point. but here's the number we're focused on today, write this number down. 13,886. if the dow ends today above that level, then it will be the best january percentage gain since
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1989. >> all right. today's closing bell exchange sandy lincoln from bmo and michael yosikamo from destination wealth management, josh brown, cnbc contributor from fusion analytics, and our very own rick santelli. sandy, you first. are you a believer in the january effect, that being as goes january, so goes the rest of the year? >> well, you know, the term january effect was coined in the early 1980s. obviously, it's been supercharged and needs to be tested for doping this year with the numbers that we got, but it's an important thing. it's not just a u.s. number. japan was up 7%. you had china up 6%. you had europe up 3.5%, and when you look for causality as opposed to outcome, you can sort of see why. china's got better manufacturing, better exports and better gdp coming out of a recession in europe in the second half of this year. good autos and good retail stuff going on in the housing side and the u.s., and you've also go the retail investors putting 15
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billion into equity mutual funds. we haven't seen that in 11 years, so, yeah, we think there's some pretty positive signs. >> in other words, do you believe in the january effect then? >> just trying to come back to the question. >> i don't think we shot the whole year in january. a lot more to could. a lot of people were expecting 6%, 2% for the entire year? >> michael, you want to put new money to work here or get to the sidelines after this big run-up? >> i think the market is going to go up probably twice what it's gone up this year. i think we've had half the gains that we've seen. market sentiments are pretty negative. over 200 companies have reported so far. 75% have exceeded analyst expectations, and if you look at what's happening with investor sentiment in terms of the private investor, that money finally probably about 80% too late, but that money is finally starting to enter into the market. we have still the beat as a dead horse federal reserve effect as well, so i think there's a lot of positive in the market right now. is it going to go straight up?
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no. is it going to blow up. i don't think so. is february and march going to be choppy because of sequestration, yes, but i think we're higher from here by the end of the year. >> much of the market's direction could spend, if we get the so-called great rotation out of treasuries and into equities. bill gross tweets out today january flows show few signs of bond stock rotation. what's keeping that rotation from happening, do you think? >> well, i think what's keeping that rotation from happening is that there's still enough uncertainty to not pull the money out. however, however, we might see some of the first symptoms that that could be about to change. bear with me. if you look at a january chart of treasury futures, you'll see yields are up. according to barclays, treasuries are having one of their worst months since march, down according to barclays about 1%. if you look at the spread high-yield index, they have moved in a positive direction.
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it's up about 1.6%. if you look at the hygetf it looks like it's rolling over. what's the long and the short of the story? if you believe the stock story, you're looking for the rotation story, you probably want to get out of high yield or look for it to reverse. why have the cheap soup when you can have the thick soup, and why not be in treasuries if the yields are moving up and not take some of the credit risk. watching some of these spreads and high yield could give you clues about that rotation. >> yeah. i wonder how important the jobs number is tomorrow. of course, we had that gdp report which showed that we took a step back in terms of the economy, but the federal reserve easy money is really the catalyst here driving money into stocks. how important the employment numbers tomorrow, and what are you expecting, josh brown? >> i think they are important, and i think there's a pretty decent correlation between improving metrics from several jobs reports and the market. i want to go back and correct something. it's not the january effect. it's the january barometer when
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you're talking about whether or not january has predictive powers for the rest of the year, and actually it's one of the better market sayings, as go january, so goes the year. it's got -- it's got a correlative effect that something like 75% or 80%. the problem is nobody tells you when you're in the 20%, and it's not going to work, but i think what's key here, and rick touched on it. this is maybe the most important question for the market right now because we know the fed is on hold, and we're out of earnings season. all that matters is fun flows and is whether or not people -- whether or not people are going to stick around, and i've got to tell you. it's unanswerable. if you lock at two weeks ago, you have mutual fund fund flows for equities at 14 billion. the week after it was 10 billion. this week it's 6 billion, so it's actually declining. the question becomes if there's a 5% to 7% pullback because of sequestration, does that put inbound fund flows on hold, and if it does, that's kind of a moment of truth for the market. we don't know yet.
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>> i think that's a really interesting point. i think the sequestration point, the two-month out point, march 1st, is going to be really probably a turbulent time, just like we had some of that turbulence in december, but i think it represents an opportunity, and i think the opportunity is not only connected to the federal reserve and the treasury market as rick was commenting earlier, but i also think it's tied to the fact that you've got a very good strong set of fundamentals underneath corporate earnings right now. valuations are not unreason, and i think the financial repression market and that argument is still very much in play. investors are still looking for yield. they are finding it in equities. they are finding some quality growth in equities as well, and i think the risk-on trade, if you're looking for opportunities in that turbulence when the sequestration comes about, that might be the place to sort of strengthen up your position. >> one other thing. >> quickly. >> leadership is coming from the small caps, copper is one of the better performing commodities in the last couple of days. the leadership is coming from
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cyclical stocks. >> it's everywhere. been such a broad-based move. the russell 2000 is up 6% so the small caps have done well. technology, even for an underper former is still up 4%. >> scott, here's what you need to look at. >> whoa, whoa, whoa. >> let's bring joe greco in. joe greco is with us a trader and from meridian equity partners. what are we expecting as we approach the close? any balance info? >> there's a considerable amount of interest going into the jobs -- the unemployment number tomorrow. obviously a little bit of sputtering on the data this morning, but we had a fantastic day if you look in the syndicate and secondary ipo arena. companies obviously, cfos and, you know, companies trying to bring themselves public are saying hey, 1500 in the s&p, let get out there and sell some shares. >> looks like things are worsening. things have worsened since the conversation began. >> i'm not going to throw everything off just yet but i'll be the bearish advocate. there's still a considerable
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amount of resistance out there in the marketplace. facing headwinds over the next few weeks. earnings season, the good really were rewarded but the bad were punished horribly so people are saying, okay, we made it through the month and will stamp the clock with a nice gain for the year. go back 20 some odd years for the record for that one but if we're only looking at upside, the gentleman a few before me, double the amount on the year, that's going to be a very long 11 months. >> how come nobody is talking about $100 oil and the impact that that could have on not only the public, consumer spending, the economy, but the stock market? >> it's a positive imsglakt did you see ups earnings? ups earnings were soft because of global shipping. that's why they are not talking about $100 oil. very mixed results from barometer earnings. ge looked good, ups not so good. what you're starting to see is corporate earnings still being fairly solid, as i say, exceeding analyst expectations, but the underlying economy is still in what i would call a stumbling recovery.
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it's getting better but it will be two steps forward and one step back. >> and i think that key is about the part about it's really getting better. it's not only getting better here. this is back to that global story. getting better in china, gdp from 7.4 to 7.6 to 7.9. manufacturing picked up an exports and in europe draghi and merkel feel the eurozone will start to come out of the recession in the second half, so i think there's more traction, economic traction, than people are giving credit to. >> on a global basis. >> on a global basis. >> china is bouncing back incredibly, so i was just in china. look at countries like singapore, malaysia, indonesia, those countries are coming back, and if they come back and at least get gdp performance, even if it's not 15%, china 7%, 8%, it's going to be huge. >> because the expectations are certainly low. gentlemen, thank you very much. appreciate your time tonight. will see you soon in the final stretch of trading.
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50 minutes before the closing bell sounds. market worsening a bit, down 30 points. >> talk about a reversal of fortune, hewlett-packard was the worst dow performer but it's the best thus far this month and bank of america, the top dow stock in 2012, the dog of the dow in january, but is either a buy right now? >> also, history says this strong january will carry through the year, but jeff cox is here to rewrite the history. his contrarian take is coming up. >> and shawn matthews is here exclusively on what's been happening in stocks and bonds. stay with us. [ wind howls ]
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makes it easy for anne to manage her finances when she's on the go. even when she's not going anywhere. citibank for ipad. easier banking. standard at citibank. well, booze stocks are getting blocked after the justice department moved to block anheuser-busch's acquisition of corona maker. kayla tausche has the developments. >> reporter: the $20 billion deal would make the beer market too concentrated saying it's prepared to take its find to go trial and leaving little hope for trial that anheuser-busch and modelo can complete the
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merger. the patient of this decision is a blow to constellation shares, down 18% right now, a move that could hurt hedge fund in a big way. many are trading or holding stz to get more upside from the deal. the latest data from q3 and hedge funds including york had exposure up to $100 million. others in the sector seeing red. little faith for more deals. scott, back to you. >> kayla, thanks so much. take a look. got 45 minutes to go before the bell rings the final day of the trading month. here it is the dow industrials 13,875. >> up next, we'll talk with aetna chairman and ceo mark bertolini. the stock down slightly after the report on earnings. >> president obama's health care reform, you have of the law has
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taken effect, union leaders are having buyers remorse. we'll tell you why next. >> and our own jeff cox says he's not a believer in the rally. that's coming up on the "closing bell." stay with us. [ male announcer ] you are a business pro.
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and still pay the mid-size price. i could get used to this. [ male announcer ] yes, you could business pro. yes, you could. go national. go like a pro. when it really mattered, they supported it. now some unions are turning against president obama's health care reform. eamon javers has the details. >> reporter: hi, scott. some unexpected price hikes could be causing headaches for some unions in terms of the
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president's new health care law and the price they have to pay for health care for their union members. this was reported by the "wall street journal" this morning, and it affects 20 million americans who benefit from these plans run jointly by unions and the employers for small business employees. the health law eliminates caps on medical benefits and prescription drugs, and it allows children to stay on their parents' plans until the age of 26. now the "wall street journal" reported that's going to drive up costs for people participating in the plans so the unions want low-paid workers to be able to be eligible for federal subsidies as a result of that. the obama administration told "the journal" this morning that the regulations are still being written. scott, this one is one of those issues that is still being sorted out in the regulatory process, and we'll see where it all shakes out. a lot of unions though seem to have their noses out of joint saying, hey, we supported this law. now we want these regulations to be written in a way that we can live with and that doesn't give us unexpected costs that we
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weren't prepared to deal with. >> eamon, thanks so much. >> let's keep the focus on health care. aetna's stock under pressure on the heels of fourth-quarter earnings numbers. profits slipping 50% due to the cost of patient care. >> and what about the broader impact as this has an effect on business in general. aetna ceo mark bertolini joins us now. unions pushing back on obama care, and their call for subsidies. is it possible that congress will take up some type of legislation that would mitigate some of the sharper edges of the affordable care act, what do you think? >> i think the first thing that will happen is they will try some of this through regulation and who is eligible for subsidies. that's up to the administration and hhs to figure out. anything more than that would have to go back to the legislature, and there's a lot that has been pent up over the
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last few years to reconsider about this bill given its cost. >> you think unions were naive in the way that this was all going to play out, either they think they were sold a bill of goods by the administration and trying to get the support, or they were naive as to how the whole thing was going to shake out. what's your opinion of that? >> i think the whole bill was written rather quickly. it wasn't really vetted well as a result of the dynamics that happened with the change of, you know, scott brown in massachusetts so things got pushed through and now we're trying to fix it in regulation, and at the end of the day we'll have to go back and fix the bill to some degree as well because the costs will be high, but that's the cost of getting more people insured. if we want to insure more americans, somebody has to pay for it. >> what's your sense in terms of how this will impact costs for business, not just necessarily health care, but business in general, and then we want to transition into your results? >> well, there are a whole host of taxes across a number of
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sectors. there's taxes on investment income. there's taxes on devices. there's taxes on drugs, and all of that flows through ultimately to premium that employers have to pay for their employees. that's going to get reflected in the cost of their prices to consumers, so ultimately it gets right back to the consumer. >> you said on "the call" today some companies are trying to avoid health coverage by reducing employees' hours. i'm wondering if that's one of the unintended consequences of this whole thing of what we need to consider and what the broad implications might be on the overall employment picture as a result of affordable care act. >> well, i think that one of the things that we always know about regulation, that as long as we're part of a free market, which is what our country is, that people are going to find a way to fix it to work for them economically, and so one of the things that we will see in the service industries, particularly hospitality and retail, is we're going to see people shorten hours on some of their employees to below 30 hours so that -- so that they won't have to offer
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the benefits under the affordable care act so i think that's a political reality. you can never really shut off all the escape hatches through just legislation and regulation alone. >> so what did you see in the last quarter in terms of anticipation and -- of the affordable care act? how did it impact your business, and what are you expecting in the next couple of quarters? >> so we've done a couple of things. we're getting ready to pear back all our expenses and took a charge for severance in the fourth quarter. we're holding back on cap-x only to the degree -- only investing to the degree of the coventry integration and what we need to do to get ready for exchanges. everything is getting very, very focused and that will have an impact on unemployment we won't hire as many people as we normally would in this year, and i think we're seeing that in the employer community. employers under 50 employees don't have to offer a benefit to people under the affordable care act, so you can see people
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thinking of ways of structuring their companies where they don't need to add more than 50 employees. >> can you address the flu and the impact on a company like yours? i mean, between the flu and a lot of other nasty stuff that's flying around out there, so many people have been ill over the last several months. how has that impacted your business. >> so, a normal flu season for us is $40 million to $50 million a year in the commercial marketplace. we saw it tick up a little bit, and we saw the spike in december, and we've accommodated that. that was part of our earnings results, and we didn't see a real dramatic impact. in 2013 we'll see more in the first quarter, but it's all within the breakage that we see in a $70 billion health care spend which is what we spend for health care services every year. it's not going to be something like we saw in 2009 when the h1n1 flu.
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>> what kind of year are you expecting, mark? >> that we'll have about 5% to 6% over what we saw in 2012. we think that's a reasonable approach as we go into 2014. where a lot of the fundamentals of the business are going to change when we bring more people into the insured marketplace and we have a lot of different changes in the way we structure our products as a result. affordable care act, so we think it's a right way to go into 2014. we're optimistic that we're well prepared and we'll do well and that we can get the coventry integration integrated into our organization. >> big picture, sir, if you could. you were critical of the way the whole fiscal cliff ended up. what do you expect with the debt ceiling because as we sit down here on the floor of the new york stock exchange watching a market that has largely gone up and not paid much attention to that fight of late, what are your expectations? can you expect anything better than we got with the cliff? >> i don't think we're going to see the debt ceiling being an issue. i think it would be foolish to
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hold the nation hostage by having a fight over the debt ceiling. i think we'll see it with sequestration. that's coming march 1st, not too far away and with the budget and the continuing resolutions. i think that's where the real fight will be, and i think we're seeing the consequences of an economy that's not investing, a government that has to pull back and what we saw in the gdp report yesterday, and, you know, who knows what we'll see tomorrow on the jobs report, but it's slowed down the economy and we're all waiting. >> absolutely. mark, good to have you on the program. thanks very much. >> thanks, maria, thanks, scott. >> we'll see you soon. the dow on pace for the best in 19 years or 24 years. it all depends on how you finish this hour. might be surprised to know that hewlett-packard is the top dow performer this month, and bank of america the worst. a quick reversal there of fortune because that was the exact opposite what have happened in 2012. so which stock do you want to buy right now? let's start talking numbers on the technical and fundamental side of the story. technical richard ross with me,
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and rich, let me kick this off with you. how do the charts look? would you be a buyer of either of these companies right here? >> i think hack yfrd is a stock ready to take off. i'd jump all over it. what i like about i.p. stocks, i keep getting older and they stay the same. taking out the neckline at $15. the well-defined downturn from the 2012 high, you're going to challenge that 200-day moving average up around 18 and push out to $21. these had a nice return. on the flip side you've got b of a, this stock not just underperforming the dow but one of the worst stocks in the s&p financial sector. 79 out of 80. that's where b of a s.textbook head and shoulders top. neckline of 11 and you want to fade this stock right here.
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>> what do you think, jeff, agree on the fundamental side? >> well, i know rich wants to jim over all hp but look before you leap, big fello. hp is still bleeding from autonomy and those not familiar with the autonomy purchase of hp, a $11 billion purchase, rode off $8.8 billion lickety-split. still suffering potential losses, and meg whitman was on the board there, so as i do see long term hp a nice piece of your portfolio, i'm very concerned short term. coming down to the 52-week low of 11. i do agree with rich on bank of america, but unequivocally you cannot deny we've seen a sensational rally and that's been the financials that are the backbone. we're averse at kkk financial that we'll see a pullback. any bank exposure to europe, don't talk about europe anymore, but european woes will come back front and center in 2013, so we do not want to touch it. we like the regional banks. >> okay. so you don't -- go ahead.
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rich. >> i was going to say i think jeff has hit the nail right on the head. in fact, it's the strength in the broader financial sector that really concerns us, that glaring underperformance of bank of america. keep in mind, this is a strong trending market. in a trending market, you want to sell the losers and buy the winners. in this case you're buying the strength in hewlett-packard and selling that relative underperformance, not just against the broader market but against that financial sector. that's about of a. >> the only thing about hewlett-packard, still a lot of uncertainty. trying to turn around the company and seen a freefall from $50 a share and right now i think it will trend back down to $11 a share which was the 52-week low. there's a big difference, goes down $5, a 33% drop. got to talk numbers, and let's talk them, baby. >> keep in mind you do have the nice m & a activity with the potential lbo with dell in the space. >> that actually hurts. the bondholders could be subordinates.
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the lbo, thanks for bringing it up, could actually hurt the stock a bit due to the subordination issue. >> i think you still want to be a buyer of hp and you don't have the pesky smartphones and tablets to get in your way because they don't really have any. >> that's a good point. >> being prudent, rich. >> maybe that was the problem in 2012. guys, thanks very much. see you soon. appreciate your time. 30 minutes before the closing bell sounds for the day. market under pressure. down 32 points. >> dow trying to post its best january in history, and history says as january goes so does the rest of the year, but our own jeff cox says history will not be on the side of the bulls this year. his bearish call next. >> and yesterday's dismal report, the market fared very well but why things may not be so kind if tomorrow's jobs report disappoints. stay with us. tdd#: 1-800-345-2550 when i'm trading, i'm totally focused. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 and the streetsmart edge trading platform from charles schwab...
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welcome back. stocks have been red hot in january. mary thompson rounding out the milestones this market is hitting and could hit depending on where we close. mary. >> as you and scott pointed out at the top of the show, 13,886 is had a we're looking at for
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the dow. as it stands right now, right at that number. if not, we'll see the best performance since 1994. still not too shabby. take a look at the s&p 500, up over 5% for the month. it is on track for its best performance since 1997, and the nasdaq is up over 4% for january in what is its historically strongest month but not a standout january for the nasdaq. so why do we care what happens in january. here's why. consider this. howard silverblatt of standard & poor's said since 1929 the market year-end results mirrored january 22% of the time. another bullish sign to consider. the s&p's 5% plus gain. it's done that in january 11 times since 1950, and in ten of those full years the index has finished with annual double digit gains ranging from just over 16% to 45%, the exception being 1987, of course, when we had the crash. that year the s&p finished with a gain of just over 2%. still positive. one last data point to consider.
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the stock traders almanac points out there's been 27 times when there's been a year-end santa claus rally, positive first five days of the new year. in 25 of those 27 years, the market finished with a year-end gain. back to you, scott. >> all right, mary, thanks so much. history shows when the s&p 500 gains 5% or more in january, it's going to be a good year for stocks with gains often tallying 20% or more, but cnbc.com senior writer jeff cox says 2013 will be different. also with us is the decidedly more bullish ron insana. jeff, i assume you just saw mary's report, so why don't you think the january effect is going to take hold this year? >> well, let's just take a couple of things here, scott. i have to point out a few myths being spread by ron insana and his ilk. one of the first things i want to talk about is the fun flows
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argument. that money is coming back into equities. money always comes back into the equities at the beginning of the year and fun flows have been more of an indicator. let's look at the economy. when you go back to the years that mary was just talking about, those best gains were almost always with a robust economy. we do not have a robust economy right now. we saw that yesterday, and we know that we're going to grow at best 2% this year. finally, those numbers are old. they are steal. the 1997 was the last time we gained over 5%. who cares what happened in 1997? this is a whole different type of scenario this year. tell me, who cares, ron? >> i don't care about 1997. >> what do you think, ron. jump in here. >> 1997 hats nothing to do with anything in the market. i like the january barometer or the january indicator, however it's called, with respect to its forecasting record. if you look at stock traders almanac, it's actually an 88.7% of the time that january is higher, the market finishes higher. not only that, i'm not into the
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fun flow thing. this whole 120% rally we've had in stocks has been largely a professional affair. if individuals come in, i wouldn't suggest they were chasing the rally. they may just be getting in to the second stage of what could be a secular bull market. >> i would suggest that when individuals come in, people have been buying all the stocks, corporations will be heading out. >> go back to the 1990s when we had a very strong bull market, individuals were in at the beginning starting at about 1992-'93. the mutual fund mania began and it last until the year 2000, so i would not at this juncture call individual investors the dumb money. they have largely been out of market. they missed 120%, and could you still have a secular bull based on easy monetary policy around the world and a strengthening economy without necessarily worrying one month's fun flows. >> jeff, did you have some kind of conversation or something with ben bernanke that the rest of us don't know about because they are not going anywhere, right? >> the funny thing was before our segment came on i was watching one of the tvs over here and i saw beyonce singing
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the national anthem, and i was wondering if ron would come in and was lip synching for ben bernanke actually. >> i do because i think he's the best. >> bernanke is not lip synching anything. they are not going anywhere. they are for real. >> he's an original. the thing about fed policy, as was said yesterday, the fed is not going to tighten policy until the unemployment rate comes down towards 6.5% or inflation, which it's not doing, gets above 2.5%, so the fed is going to be easing still for quite some time and the economy is strengthning and a lot of good things are going on. energy expansion, manufacturing is coming home. we've talked about this many times in the past. the profit reports we've seen thus far is quite encouraging. hard to argue that the market is sending a message that it's in trouble. >> encouraging is in the eye of the beholder. we took these numbers down so far for the fourth quarter it was ridiculous. we're looking at maybe a 3% profit growth this quarter which is not really growth at all in my eyes. you know, some of the other things, too. we talk about inflation that everybody wants to dismiss
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inflation. the fact of the matter is that we know that the cpi numbers cannot be believed. we know that gas prices are going back up, and at some point all of this is going to come back and nobody is even talking about europe. where is europe in all this? this myth that europe is recovering. >> why is it a myth? >> we're not even talking about it. >> that will come back into play, for sure. >> we're not sure about that. >> the italy elections and debt coming due for election. >> 26% unemployment in spain. >> can you really say that things have improved that much in europe? >> in the financial sector. it starts in the financial sector and works its way to the real economy. the european central bank has done the right thing and european banks are paying them back at a more rapid clip than expected, and i think you're seeing the groundwork laid like you saw here in 2008 and 2009 for a turnaround in finance which leads to a turnaround in economics. >> yeah. i was just in new york yesterday, and dick bove yeah is
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back and his thesis is banks are on a 16-year bull run, for the section 16 years they will go up. >> i would agree. >> and it's all dependant upon this economic growth that we all see happening that will happen in the face of trillion dollar deficits, happen in the face of a federal balance sheet that would go like buzz lightyear infinity and beyond. like i said the last time you and i were talking, a cries isn't a crisis until it's a cries and somewhere down the road i don't think it's that far away we'll all be scratching our head and say how did we miss this because we just relied on the same indicators that you guys like to talk it, and i don't believe any of them. >> when i look at the markets, as i said about 2007 last week, we got early warnings signs across the board. credit spreads blew out. stocks came down and all things happened in the market that portended a very bad outcome. that's not the case. don't see it anywhere in the world, u.s., japan and chip which i think will be the three strongest markets to play this year. they are all doing better, and
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it would be i think premature to discount the recovery in the rest the world which will help corporate profits here at home. >> one thing real quick. >> sorry, jeff. we'll pick up the conversation another time. >> ron, jeff. >> thanks, guys. we have 20 minutes to go before the bell rings. 13,877, so as it stands now, this would be the best gain in january since the year 1994. we have to be above 13,886 for it to be the best january gain for the dow since 1989. maria, however you slice, it january was a good month for stocks. >> it was a great month for the market, but it was a month to forget when it comes to apple, that's for sure. despite the big blackberry announcement, a rough couple of days for rim, a look at tech favorites and others making big moves in tech. >> and the business of death. it's bigger than you think, and now the funeral industry is being forced to adapt to shrinking margins and the growing waist lines of americans. tyler mathison is killing it on
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this story, and he's here later. ♪
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first, research in motion, a classic example of buy the rumors, sell the news. the stock rallying ahead of yesterday's blackberry release and moved lower once the street found out that the blackberry would come out perhaps later than expected. facebook on a tear, but its recent earnings report got the street somewhat concerned. a couple of cautious analyst notes hitting the tape this morning and netflix, good news here, stronger subscriber base here in the united states and overseas. the stock hitting a multi-year high, and apple, you know i was going to go there. growing concerns around iphone 5 demand weighed on shares but the big drop came when it reported disappointing earnings. in the past decade there's been four other instances when apple has fallen more than 14% in a month. even without apple, maria, the nasdaq was able to eco-out a gain for a month and that's due to strength and semiconductor stocks, biotech as well as online travel. back to you. >> all right. seema, thanks so much. watching ray lewis this weekend? >> yeah. >> ravens/49ers.
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let's close it out here. a market is down 35 points on the dow jones industrial average. scott, we are basically steady from where we have been the last 30 minutes or so. >> here we go. the san francisco 49ers take on the baltimore ravens in the super bowl in just a couple of days. the 49ers ceo jedd york is also dealing with a super controversy brought on by one of his players. >> you have to understand that chris made a very idiotic statement. >> our brian schactman has much more coming up on what that statement actually was. >> going to stick your neck out and tell us who is going to win on sunday. >> i'd like the 49ers. >> i've got to go with you. the march towards dow 14,000 beyond hitting some speed bumps the last couple of days. tomorrow is jobs report. will it send the market higher or start the pullback that many have been predicted. stay with us. so you'll be happy to know that when it comes to your investment goals, northern trust uses award-winning expertise to lead you through an interactive investment process.
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welcome back. final few minutes of trading here for the month of january. the dow right now taking aim at the best january percentage gain
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since 1989. with the decline of 42 points. there is stock for sale as we approach the close here but we may very well see that sales pared off. if the dow were to finish above 13,886, that would be the situation. otherwise it's the best january since 1994 which is pretty darn good anyway. scott? >> got that right. with us brian singer, the head of dynamic allocation strategies at william blair, very own bob pisani joins us as well. brian, welcome, begin with you first. >> thank you. >> the whole january effect, believer, non-believer, what are you? >> non-believer. >> why? >> well, if the market is up in january, and we're already up 5% or so in january, we're already up 5% under our belt. if i had to pick any number from here, we'd be up a little bit over the year because we've got that under our belt. no reason whatsoever in any economic terms why that should have any implication for the rest of the year. >> i agreement you know what i believe in, scott, i believe in fundamentals and facts. that's all i believe n.want i want to see, fundamentals, things you can measure.
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don't tell me because january did something, the whole year is going to do something. i want to see growth in earnings, and are we going to see that, bob pisani? >> that's part of the problem. the numbers have come in pretty good. we're beating the numbers, but the guidance is much more conservative than norm a. we're not getting the little oomph in guidance and most are saying the big jump in earnings, expecting almost a 10% boost in earnings from the s&p 500 this year will come in the back half of the year. once again they are protecting themselves by claiming it's going to be in the back end of the year. >> that's what they said in 2012, and the fourth quarter was a big thump. >> wait. we're still through it. by the way, the financials were up almost 17%. remember, you and i went back and forth on that when they said it would be 20 and they knocked it all the way down and so far the numbers have gotten pretty good. i'm just worried that they won't be able to make it in the second half of the year because we're going to be in the slow growth environment all year, and that's what is kind of freaking people out about yesterday's gdp number. >> if that's the environment we're in, how do you allocate
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capital? >> the big issue is we went through the fiscal cliff, big resolution, exceedingly narrow and a lot of complacency now as people are going in. we still have to get through march, and march is now a lot worse than december was. we've got to get through the new sequestration date on march 1st and got to get through a continuing budget resolution on march 27 and guess what? that's the only place the republicans have any power in this negotiation, and they will probably push a little bit of brinksmanship. >> speaking of sequestration march 1th, they are the ones getting killed, the downside leaders and still decent numbers out of northrup drummond. >> you still didn't tell us how to al gate capital. >> we are long equities, but we have put protection on our equity strategy. in essence, we're long calls. when you put all of that together so that you can participate in the upside and protection on the downside, but as complacent as investors were, as low as the vix got in the first few weeks of this month -- >> if the vix is still low. >> it's cheap protection.
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you should own it. >> everybody is buying cheap puts, right? >> ahead of dynamic strategies, yes? >> a head of static strategies, for example? >> indexing. >> what happens to indexing. the ones who ride through this pain. >> i'll let you walk in. >> thank you, gentlemen. great conversation. see you soon. bob, good to see you. thank you very much. >> thank you, maria. >> see you soon. >> up next, we're back with the closing countdown. it would the last one of the month of january. >> certainly has been an historic january. find out how historic after this short break. stay with us. obligations, but obligations. i need to rethink the core of my portfolio. what i really need is sleep. introducing the ishares core, building blocks for the heart of your portfolio. find out why 9 out of 10 large professional investors choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus which includes investment objectives, risks, charges and expenses. read and consider it carefully before investing. risk includes possible loss of principal.
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all right. welcome back to the floor of the new york stock exchange. time now for the closing countdown as maria and i watch this dow try and close out the month, and it's a dog fight here to decide whether it's going to be the best january since 1989 or the best since 1994. however you slice it, it has been a very good start to the year for stocks. >> been a great start to the year. all eyes, the focus is going to be on the jobs numbers tomorrow. we're expecting the unemployment rate to stay the same at 7.8% and the number of new jobs created to come in at 168,000 in step with what we saw with the adp report. no surprise that people are taking to the sidelines today ahead of the report on the heels of the anemic report on gdp yesterday. >> people tomorrow will make decisions tomorrow on what the jobs report means and how all that have factors into what the
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market will do from here throughout the rest of the year. >> the fed is here to stay. you think the fed is going to stake its foot or the it was at this point. >> nope. >> let's talk about that. talking about the federal reserve and putting money to work. do you think the federal reserve is going to be there in terms of putting new money to work? i think the fed's going to start to slow down on their activity, and they are going to start to look to unwind their positions as they get in later this year. i think the bigger question is how does the fed drain the liquidity from the system without -- without impacting rates and without getting the balance sheet blown up? >> what makes you think -- >> terry dolan. i didn't mean to forget to introduce you. >> what makes you think the fed is going to take the foot off the gas? at every moment where you might think you get a data point that makes you rethink that, right? >> one sense or another that's true, and that's been the play that the fed has been going through. right now i think that they are looking at an improving economy and looking at growth. the job market in particular isn't exactly where we want it to be, but it's close and been a steady growth market so i think
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that the interaction between the fear of inflation and the action to stimulate the economy is what's going to drive them to take a step back right now. >> terry, do you see individuals in this market? i mean, what i real want to know is this an institutional market all the way, or are we actually seeing the retail guy come back no this market? >> that's interesting. one of the drivers out there has been this bond unwind where people are take the interest rate risk off the table. you've seen a lot of more 401 money and more retail money start to wean into the market. i wouldn't say that the public is here in totem but started to get interested here. i think they have seen a market test other lows in spite of europe's problems and be resilient. i think the public is looking at a very strong market. >> you've been down here a while, ain't your first rodeo. january effect, fact or fiction? >> well, of course, like an adage, it's a farmers almanac kind of thing. i would suggest --